I've decided to NOT buy at Olive8....now what?? What are my options?
So you've decided to not go through with your purchase of a unit at Olive8. What are your plans? Walk away from your earnest deposit? Hire an attorney? Discuss your thoughts and ideas in the comments section.
I'm one of the non-buyers at this time. I'd love to get together with other non-buyers to discuss our options. Hire an attorney? I'd consider it, but I don't want any more out of pocket expenses. Anyone else want to get together? I know of two attorneys that are representing olive8 buyers. I'm sure they'd be interested in meeting with us and sharing their thoughts.
instead of paying out of pocket, you are still due interest gained (even if the earnest money is forfeited) on the earnest money while o8 has had it the last couple years.
take that earnest money interest and put it towards a lawyer. its usually 1k for initial cost then giving him 1/3 of the total settlement
out of pocket cost is 1k plus 1/3 of whatever he gets back
Lawyers are reviewing the contract and if they are go than we are looking at class action. This way no one has to pay the retainer fee and pay percentage of from collection.
From my assessement, a class action indicates that the developer will not give in easily and is willing to litigate. This is risky for all prospective buyers looking to hire an attorney and litigate because if you lose, you will pay for the other party's attorney's feels. So if you're not willing to spend anymore than your earnest money, you might want to think this through. Also, just because you don't pay an attorney for the retainer, there's still out of pocket expenses you will have to pay, such as filing fees, printing, and mailing fees, etc...
I spoke with Marc at Law office of Craig Blackmon. He has a few Olive8 clients right now. There is a retainer fee and then he gets 1/3 of the recovery. Be prepared to negotiate with the developer. If you only get 50% back, the attorney gets 1/3 of the 50%. Not much left after that.
Has anyone spoken with Steve Crane at Crane Dunham?
So let's play out the scenario on a $30K earnest money:
Scenario A. At 50% recovery that's $15K minus a small retainer of say...$1k. Now, that's $14K minus 30% = $9,800. (Doesn't factor in filing fees, etc) thus this amount could be a little less than $9,800 back to you.
Scenario B: Say you lose after ligitation and have to pay the other party's attorney fees. And let's just say a few clients equals three existing and include you would be four clients to divide this expense - assuming you retain the same counsel. Now, the unknown factor is the attorney's fees. For the sake of simple arithmetic, what if the developer's attorney fees are $40k? Then you're each out $10k.
In short, if you were to weigh the risk vs reward; There's a chance you could recover $9,800 or fork out another $10K. The net net in this case is the risk outweighs the possibility of an award.
Sorry, it's late, I hope my rationale makes sense...
Now, I'm not advocating no attorney, because I have also considered hiring an attorney to recover my earnest money. However, I'm reluctant because I do not want to incur additional losses...
But is 2/3 of 50% worth another $9800 to you?? Thats the risk!
On the contrary, if an attorney is willing to file a lawsuit, that is a good sign. If they don't think they have a chance, they will not waste their time and effort to go through with the lawsuit. Don't forget, if they lose, they only earn the retainer fee and they've lost on all the hours spent preparing for the lawsuit.
I am not an attorney but I work with them on a daily basis. I am an expert hired by attorney to testify inside and outside the court system. Litigation is the wrong way to go because this would take a very long process and it is very expensive. Litigation may take years because of our court system. Your best bet is to go for arbitration. This is the quickest, cheapest and most practical way to recover your money in full of partial. Not sure if you guys know what artbitration is, but for the purposes of discussion, this is decided by an arbitrator mutually selected by both the defense and plaintif counsel. This process is conducted outside the court system and the results are almost immediate. Here are few suggestions that I would like to offer: 1. Gather as many people as possible and collectively decide on a legal counsel. The more the better because your attorney fees would be almost insignificant.
2. Start a dialouge with an attorney and discuss important terms and these terms should be made contingent on the outcome of arbitration. Be clear (well documented terms) on attorneys fees and % of money that would go to the firm once settled. You can also arrange for the Olive 8 to pay your attorney's fees if the arbitration results rule in your favor. You also would like to be clear with the attorney that if the verdict is against the group that you are not willing to put out more money out of your pocket. All these could be discussed with your lawyer.
I know you guys don't know me but trust me this would be your best approach.Securing the services of an attorney would be imperative and do it quickly because you close of escrow if fast-approaching.
Arbitration vs. Litigation: I also posted on the looking for concessions section of the blog. go there for my full post... in summary the suit would have to be filed in District court which date would be set sometime late in 2010 or possibly early 2011. It will most likely be 2 - 5 years for court determination and then you have to collect.
*** Go Arbitration... but, we all need to get going! ****
If you are all interested, I'd be willing to facilitate another buyer's only event. I would invite all of the buyer's that are NOT planning on closing. I would invite two different attorneys to attend (at differing times) to present how they could help us. Or, we could meet separately before setting a date to meet with the attorneys. At this time, I know that Craig Blackmon and Steve Crane are attorneys that could potentially help us. Thoughts??
I reserved a unit at Olive8 and will not be closing on the unit. I do not want to hire an attorney. Does anyone know if it is possible to write-off the earnest deposit? I was planning to buy the unit as an "investment" property, but I used my personal name on the paperwork. If I would have used an LLC, I probably could have written it off. Does anyone have any experience with this?
I've had several friends who are talking with Steve Crane right now about their deposits with Vulcan, but i think they are going with percentage of settlement or a combination of fees/settlement. Either way, I know they can't afford to just give up their deposits so obviously the benefits outweigh the costs, at least in their case. It can't hurt to call I suppose.
Re earnest money : Met with accountant if you can prove that your intent to purchase a condo was for business such as through an llc to make profit and you then decided not to go ahead due to market conditions then you can claim a loss at $3000/ year on your tax return. Better than nothing :)
can any case be made about the fact that we were sold the condo under the premise we could buy with 5% down, now it is 15% down. going from 35K down to 105K is huge. and now the developer gets to keep the 5% if you cant come up with another $70,000... it just seems wrong.
I am confused as to what you guys think you can sue the developers for? Its not their fault you fell for the real estate bubble, I am sure they wished it kept going as well so both of you could be rich. It seems to me a lot of people made a gamble and lost and now want to sue the house for their money back.
After seeing what was supposed to be my "luxury" unit last week, I've now decided to walk.
I really wanted to live in the building, and I thought it was a great concept, but their execution has been poor. I won't be hiring an attorney, because it would be useless.
We all took a gamble, the economy tanked, and Olive8 didn't pull through for us with a quality product. I'm moving onto the next battle...
by buying pre-construction, you all took a gamble. you were getting in at what you figured was a lower price. you win if: 1. prices appreciate 2. the layout turns out how you like 3. homeowner's dues stay the same 4. the building is fulling occupied
all four scenario's apparently are not coming true. so, your gamble lost.
don't try to socialize the losses by dumping your properties back when you were hoping to privatize the gains.
Here's some advice. I know it sucks but you shouldn't have been getting into something that you possibly couldn't handle. I am a buyer and I'm continuing with my purchase. This is possible because I was prepared for what I was getting into in the first place. It's known that if you go to purchase something... ie, house / condo, and you pull out... you more than likely will lose your earnest money. All of what I read above just gives me a headache. With a lawyer, when it's all said and done, you won't be getting much back after taking a deal and paying them for the help. But do what you like. Sounds like most of you were buying in as a investment property. Well with all investments there is the possibility of loses and that's what this is. Hope it works out for you all. On a possitive note. You can probably get the interest made on your deposit.
It's true that it sucks, but why would you continue with your purchase? The market value of these units has dropped by far more than the earnest money deposits. Even if you want to buy, the only rational move is to forfeit the earnest money and negotiate a new deal at the current market price. Am I missing something?
Well depends... I actually don't think my unit is below market. I bought in first phase so... When I run comps I'm good to go from the numbers I see. As well as having faith in the building and the future. It's not like you're buying in a rats nest. What is going to drive down the price is everyone bailing which I and friends discussed along time ago. In all the buyer gatherings I could tell a lot of people were not really buying into something they could hang with is something happened. So surprised we were close to right. I have 2 friends that are opting to lose and there's nothing they can do. Sucks totally sucks.
What are you using for comps? The only condo I've seen coming in at the Olive 8 price is 1521 which is averaging at ~$700 sq ft - for a building that is arguably more high end than Olive 8.
Everything else seems to be coming in under $500 sq ft e.g. look at Mosler ($500), 5th and Madison (under $500) and Gallery (as low as $450).
I was perfectly aware that I could lose my deposit if I walked. HOWEVER, i am not walking because I want to, I was qualified to buy witha 5% deposit, I am now required to put down 15%.... thats an extra $75,000.00 - i dont have it, so now the developer gets to keep my deposit, That is a little tough to swallow. I dont agree with investors trying to get their money back because they made a bad bet, but I am not an investor, and I want to close. look, I know its my fault for putting ink on the contract , but I can be pissed if I want to ( and try different methods to get my money back.)
Good luck to those that are moving forward with their pre-sale P&S agreement. As for me, I will back out as I do believe prices will come down after developer reviews who's closed vs. who's backed out.
It's another decision. If it turns out that pricing is lower than compared to the reserve pricing then we've made the right choice. If not, then it was not meant to be in the first place.
I just want to avoid feeling even more stupid for buying a unit at $595K just to see the same unit above me that didn't close for $495K - which could become reality. If that's the case, i've only lost $30K vs. potential of $100K.
So again for those who are closing - we'll just see in the coming months/year ahead who's doing the right thing.
Alright guys....for those of you interested, lets talk about getting an attorney. I've just received the name of a 3rd attorney that is working on a class-action lawsuit against Hedreen.
Who's interested in another buyer meet-up? This meet-up would be for buyers that are planning on walking away and NOT purchasing. I would have the a couple of the attorneys join us for the meeting and present their offer.
I'd be willing to consider hiring an attorney if it wouldn't cost me to lose even more money. I am ok with walking away from my 30K. I am not ok with losing another 10K just to chase after some of the earnest deposit. I'm interested in finding an attorney that has no retainer. I also would prefer joining a class-action lawsuit. The reason for this is in the event that we do lose, we then split the cost of the defense legal fees between a large group of clients vs. footing the bill on your own.
If interested in another meet-up to talk with 2-3 attorneys (they'd come at different times), email me.
Not an Olive8 buyer. In fact, I live in Phoenix and stumbled in here through a link.
Something to think about before closing: going forward, your biggest competition in determining the value of your condo will be the developer itself. When push comes to shove (or bankruptcy), the developer (or its creditors) will find that NO price is too low to contribute to the recovery of defaulted bonds. Most companies can't, or won't sell items below cost. A bankrupt company can, and usually will, do so.
There's a big difference between someone getting their LCD TV cheaper than you at the Circuit City liquidation sale, and the developer selling a unit (forever known as "a comp") at half the price of what you paid for it.
Your first loss is your smallest loss, right?.........
1. Concerns about unsold inventory. Olive 8 is a higher level building with a higher price tag which I believe will have a tough time moving the remaining inventory over the upcoming years. Are there really people out there who are willing to pay 500-800k for a sub 700 square foot condo? Not in my opinion. My guess is that the remaining units will either go the way of: auction, apartments, and/or price reductions. None of which bode well for current buyers. Am I willing to bet prices will drop greater than 5% (my earnest money) of the price I'm locked in at? In my case - yes.
2. Changes in the financing climate. It's harder to purchase a condo in comparison to a house, and with this building possibility becoming a high number of rentals, it's going to be even tougher for resales. We're starting to see this with Williams Marketing already renting out units. I'm absolutely shocked to see that clist ad with the WM logo plastered on it advertising a rental. Lower amounts of rentals makes the building more appealing and also easier to finance. Why the company marketing the building is also playing renter just seems like they're shooting themselves in the foot. Not a way to inspire confidence in those planning to close.
3. How investor laden the first half of the building is. Those of who reserved planning to make Olive 8 our primary residence are really getting the shaft here. I feel like I fell sucker to a classic pump and dump. When I signed a great number of the units were already reserved. Little did I know that a lot of those reservations were investors or actual real estate agents. Had I known I may have made a different decision. No one to blame but myself on this one.
4. Finished quality. Not impressed one bit. I think they've really dropped the ball on this one. From the units not measuring up to the original square footage to the touch and feel of the unit, it just didn't give me that "wow" feeling I was expecting to have. Think of it as expecting a Lexus and instead receiving a Toyota. I don't think I'm the only one that feels this way - looking at the number of units showing up on craigslist one can see that the number has multiplied since the open house. IMO the developer was in a rush to get them done and cut corners in order to make it happen. I could be wrong though.
To me it's a perfect storm. If unsold inventory wasn't a concern I may be willing to overlook the finished quality, if finished quality was what I was expecting I might overlook the concern about unsold inventory, ect. But it's really a combination of all four that made my decision not to close a concrete one. The fact the developer has been absolutely silent throughout this entire process has cemented that decision.
Why I would consider closing:
1. No HOD's in the forseeable future. A building must be 70% closed to start collecting HOD's. Chance are this 70% mark won't be hit for a couple years.
2. Already got my 5% in. If I could buy the unit without taking any more money out of my pocket I probably would and just rent out the thing for the next ten years.
3. If I was in for the long term I'd close. Five years won't be viable, ten years yes.
4. The pool area/gym is cool.
It really stinks to walk away from that 5%. But I've been without it the last couple years and while it would be nice to have it back (hello new car!), missing that 5% won't affect my life at all. I could sit here and think to myself what I should have done differently but that won't change things one bit. Reading the news daily about the hardships others are going through pales in comparison to the 30some thousand I'll stand to forfeit. Heck, I have a decent job, good health, and close family. What else could one ask for. :)
Sorry about not getting back to you. Here's the update:
I've spoken with 2 out of 3 attorneys that all represent Olive8 buyers. I've made contact with the 3rd attorney and will be speaking with him tomorrow. Once I speak with him, I will arrange a time for a buyer meet-up to let these attorneys present to us. Then, individually, you can decide which attorney to work with, if you decide to do so. I'll provide another update in a few days.
I can't close and they told me they won't let me assign the contract if I find a buyer. They are letting other people assign and I see one of their employees are assigning their contract. This is completely unfair, is there anything I can do?
down for these meet up as well. Looks like it might be prudent to just walk away at this point but if I can get some money back that I deserve then I'm all for it. Kinda got screwed by wiliams...
There have been 10 closings so far and 5 additional sales in the past week. In my opinion the building is amazing. I do not think anyone got screwed by williams. We got screwed by the economy. It is the worst possible timing. I think it is completely fair to get half of our earnest money back but we are probably not entitled to all of it. We are all victims of unforeseen circumstances.
I have nothing to gain by saying this. The past year was presale. There is a big difference in presale and actually selling a unit that is ready and available for purchase.
people PLEASE stop attacking people who post positive statements here. I come to this site to get info, and info is more valuable if you get it from both sides, whether or not to close is a HIGHLY debatable situation with many variables ( influenced mainly by price,hold time and what happens to the economy going forward), if I want one sided I'll watch fox news.. I am walking from my deposit ( I am forced to by being out of work), and I would love to get half of it back, but that is not what I am hearing from williams or the developer.
I've spoken to 3 different attorneys at this point. They all currently have Olive8 clients.
Law Firm A: They are considering filing a class action lawsuit. If that is the case, then every Olive8 buyer that walked away from their deposit or decided to close would benefit. A decision by this law firm will be made by the end of the week. They are a large law firm with almost 20 attorneys. They have already reviewed the P&S and outlined multiple "common" issues that they have found. Hedreen has responded and is going to fight. If they decide to not pursue a class action, then they would likely go contingent or hourly.
Law Firm B: He currently represents multiple Olive8 buyers. He is charging a retainer fee and then it is contingent (1/3). He will also do hourly work. He has already reviewed the P&S and has sent the initial letter to Hedreen. The response has not been good. It will be a fight and the developer is not willing to negotiate.
Law Firm C: He currently represents 6 Olive8 buyers and has 4 more coming on. He also charges a small retainer fee ($250) and then its contingent. The retainer fee will also go towards legal fees (copying, filing costs, etc), so the retainer fee is essentially credited towards client costs.
Anyways, this is all pretty good news. I'm very hopeful about Law Firm A and will know more information by this Friday.
I'd like to setup a buyer meetup and have all 3 attorneys come for 15-20 mins each to make their pitch to us. Law Firms B and C would like us to sign up because the more clients they have, the better they can negotiate. Law Firm A says that we don't need to do anything if they file a class action...we are automatically included.
For these attorneys to come to our meetup, I will need a decent group of people that are willing to attend. Please email me at olive8buyer@gmail.com if you are interested. Tell me the date that works best for you. I'll probably do an evening time during the week next week.
Class action lawsuits are a red herring...careful if you decide to go that route...they always benefit the lawyers more than the individuals represented. Look - it's tough - but you signed an agreement and knew the risks. If you did this with a normal homeowner you wouldn't get the money back either - that's real estate 101! We've actually started to look at Olive 8 as a buying option...and yes if you check with any agent there have been recent closings there (I think I saw 3 in the last week according to our agent)...so people are buying...and this weekend we bumped into folks moving in...so all the doom and gloom on this blog is understandable but not helpful unless you are just here to vent. Getting loans for condos are super tough right now...but if you want to live downtown, there aren't many options...thus making any condo purchase a good long term investment. Just wanted to bring some objectivity to the discussion. :)
If you really want to be objective. Don't compare what has been the norm in real estate years ago or what you call "101". What happened to our economy is unprecendented and whether you like it or not you have to put this into consideration. What was disccused 2 -3 years ago with these buyers as far as "standard" loans practices are concerned are no longer applicable in today's economy. There needs to be consideration placed here for the buyers. If people are using this site to vent then respect them because it is their way of coping. Your quote "objectivity" is not adding comfort to people you are putting salt to a gaping wound and I think that is cruel and rude.
After speaking with law firm "A" about class action lawsuits, they indicated that their plan would be to recoup their attorney fees from the developer and the developer's insurance company, not from buyer deposits. So why wouldn't we consider going that route?
olive8buyer, I sincerely appreciate what you are doing with the blog etc, but for the love of god I am trying to figure out why you are not listing the names of the attorney'(s). I do not have as much time as you, and i need to ask them a couple of questions. I think as the blog creator you can see what my email adress is, so please email me if for some reason you are not willing to post it. you keep saying ab&c... how about some names, if you are planning a "meet" we are going to find out anyway, how about some help for us people on the lower floors who dont have any more time. PLEASE!!!( especially the class action one)
"Re the Firm A class action option... What happens if the suit goes to court and loses? Are folks on the hook for the developers legal fees?" No, Lead plaintiff might be hooked for fees related to filling, copying, etc. but not developers legal fees.
"And what about folks who already have chosen a legal path? I don't like the idea that some firm can come along and decide to be my attorney for me." You don't have to be part of Class Action, if you choose not to.
It seems that there are three basic choices that buyers have who are not going to close: 1) walk away from the earnest money deposit without seeing if they can recover part or all of the deposit, 2) hire an attorney to represent us now as individual buyers, or 3) wait and see if someone files a class action case at some time in the future.
Assuming that one is not ready to walk away from their deposit, then hiring a law firm experienced in doing condo deposit refund cases in many buildings all over the area, and that represents buyers on an individual basis, appears to be the best available option to me. It provides a buyer with legal representation, on an individualized basis, as important decisions need to be made NOW about what to do concerning escrow, financing, scheduled closing dates, etc.
It is my understanding that class actions have very strict requirements that have to be shown to a judge to have been met. They also typically take much, much longer to get resolved than non-class action cases. Perhaps more importantly, they are much more difficult to get settled directly with the other side because the dollars involved are much larger. Finally, while settlements in class actions may split out legal fees from awards to class members, the reality is that this is almost always an accounting exercise that simply reduces the amount which class member will ultimately get. One way or another, the buyers will be paying legal fees out of the settlement, whether as a class action or as an individual action. All of this without individual representation of a buyer’s interest.
I decided not to close my unit. Do I lose the earnest money only or lose all the money including interest? I would feel better if I can get some money back.
I have not signed the termination agreement, but i plan to. I think I want to just put all this behind me, it is one disappointment after another. I knew the risks, but using their preferred lender, getting qualified to buy with 5% down, then being told I need to have 15% down, and If I cant come up with it, they get to keep the earnest money? it is making me incredibly angry to keep thinking about it, so I think I need to just put it behind me. ( I really think it would be fair to get half of earnest money back)
Do not sign the termination agreement. The second you do that, they get the earnest money. Otherwise it is held in the courts and they wont see the earnest money for up to 18 months. It cannot be released to them unless you sign the termination agreement. A small bargaining chip for you.
There is now the 09 plan lsited on MLS #29055419 for $375k that is a resale. I am 3 floors below this and paid more. I dont recall prices in 06 being this low.
Also read this article: http://seattletimes.nwsource.com/html/localnews/2009113376_condoclosings24.html
This part made me extremely nervous:
Thirteen Olive 8 units have closed so far. Thyer says closings should continue into July. “At this point, we’re still holding our prices,” he says. “But if the downturn continues, we may have to revisit that.”
In todays seattle times article, David Thyer says closings are going great... LOL... who is he trying to convince? I that by my closing date there should have been at least 59 closings, there have been 12! do the math. People are running, not walking from their deposits. I almost feel bad for the developer. almost.
“But if the downturn continues, we may have to revisit that.”
Yea, I'm really going to close now. Was he really quoted as saying that. Really? Seriously? For real? Why would I want to close when prices are going to drop? My goodness.
Has anyone else received a call from the developer trying to salvage the sale? The person on the other line said there were "options available" but locked up when asked specifically what. How about taking 20% off my sales price? Then we'll talk.
Too little, too late. Should have received that phone call months ago. I may have actually considered it then.
So what lawyer/lawyers is everyone going with?
Oh, and yea, only 13 closed sales? They've closed five floors? Are they nuts in thinking that's a number to publicize?
The developer is offering second loans on 5yr terms if you are having difficulty coming up with the deposit but are able to service the loan. Not a bad option if you really want to live there and believe that there IS a future for U.S real estate!
Yeah, very encouraging that people with upcoming closing dates will see prices drop after they close. Nothing like knowing your neighbor 3 floors above you with killer views paid 200k less because they didnt lock in at "early prices"...
My closing date is coming. However I decided not to close the contract. Do I need to notice the Williams Marketing that I want to terminate the contract now? I heard some people working with attorney to get honest money back. I'm not sure it's worth. I really want some advice. Thanks.
Just wanted to let you know that Steve Crane (attorney) has negotiated a tolling and standstill agreement with Hedreen. This stops the statute of limitations (2 years from signing the purchase and sales agreement)from coming in to effect. How is this helpful? If you ever decided to file a lawsuit due to deficiencies in the contract, it could be dismissed by the court if the statute of limitations comes into effect. By having him add your name to the agreement, you are protected from this. Also, he has negotiated a non-litigation agreement for a short period of time as mediation and/or settlement is discussed.
I'm not sure if I explained this properly but call Steve and he'll be able to explain it better. Again, for $250, this isn't a bad option if you are definite you aren't closing or even if you want to negotiate with Hedreen but your 2-year mark is approaching.
Alex Thomason is working on a class action lawsuit with quite a few Olive 8 buyers. They are taking cases on contingency basis. (25-30%) I have listened to many attorneys and Alex's approach seems the one with the best chance in front of a judge. Alex's law firm is very experienced and knowlegable in this and know how to manage class action lawsuits. If they weren't convinced this case is winable they would not have taken it because they only get paid if they win. There is power in numbers so if you are thinking of walking away from your earnest money, talk to Alex first.
ALEX H.S. THOMASON | LAWYER
STANISLAW ASHBAUGH, LLP
COLUMBIA CENTER | 701 FIFTH AVE | SUITE 4400 | SEATTLE, WA 98104 T. 206.386.5900 | F. 206.344.7400
Crane and Dunham has nearly 20 buyers on board,they are also working on contingency. maybe all these attorneys should get together and have a cup of tea and become friends.
just remember, yes there is power in numbers, especially for the attorney. most buyers cases will be very similiar despite what they tell you. in short, they will put roughly the same "man hours" into one buyers case as they will into 50 buyers cases, but with 50 they will collect 50 times more money.
I am shopping attorneys as well, but I know the contingency deal doesnt mean they are "oh so sure" they can win, it just means there is a truck load of buyers looking for lawyers.
If you are shopping attorneys, as most of us are still undecided, can you let us know what you find out and think. It would be good if all the cases could come together. But probably not going to happen.
I know Rebecca Reed also has some Olive 8 cases. And so does Benjamin Lee.
I am the one who recommended Alex as I know some others who are using him and have talked with him and have been impressed.
But I still have not signed with an attorney yet but will have to very soon.
Does anyone know the legal theory that these attorney's are using to try and get a buyers earnest money deposit back? The P&S seems pretty clear to me, and I haven't figured out what angle they are using against the developer. Is it the number of buyers banding together to do this? I know in Miami, et al, this has not worked. Can anyone who has talked to one of these attorneys and understands it shed some light on what the basis would be?
after it being explained to me, My understanding is ( and this is the case with most of these situations) the lawyers try and find some tiny detail within the contract, a tiny loophole or a "T" left uncrossed by the developer or a statute from the early 1930's... you get the idea, then if argued correctly in front a judge would/could negate the entire contract.
my closing date has already come and gone, I do not have an attorney... yet.
I talked to one lawyer who is considering using the Interstate Land Sales Full Disclosure Act (ILSA). He said there is going to be a ruling in Washington where the plaintiffs argue the sponsor did not follow ILSA and therefore voids the contract. The decision is to come this week or next and should set some history and guidelines about whether other buyers can use ILSA to recover earnest money.
The Interstate Land Sales Full Disclosure Act (the “Act”) is a federal law regulating the sale of condominium units and subdivision lots. It is patterned after federal securities laws. The developer’s failure to properly register a subdivision can give purchasers the right to rescind the contract. Purchasers also have causes of action for fraud under the Act. The Act is largely ignored until the real estate market collapses. By no coincidence, litigation under the Act is heating up in Florida and other locations in the current market. The Act is a widely misunderstood law. Its statutes and regulations are ambiguous, its case law includes more than 100 cases spanning forty years and nearly the entire United States, and the United States Supreme Court has never substantively ruled on any aspect of the Act (though it mentioned the Act in dicta in one case in the mid-1970’s). This article explains some of the fundamental principles underlying exemption from the Act. It also discusses the major exemptions at the heart of most current litigation.
For those of us that have not yet signed up with an attorney, can you tell us why you chose Craig Blackmon over the other lawyers listed on this blog? I haven't decided yet, but I believe Blackmon's office had a higher retainer fee than some of the other lawyers.
You guys might want to keep a few things in mind regarding this idea of "nothing to lose" retention of lawyers. First, the developer made a decision to add three floors to the building in large part due to the fact that they had almost sold out very early in 2006. Those buyers that were "deceptive" investors and stated that their purchase was for primary or secondary homes may be subject to fraud claims and damages incurred by the developer. Second, if you lose, you WILL be at risk for the developers legal costs, which would most likely be significant. This is definitely NOT a no risk approach.......
They would have a very difficult time proving if you were a "deceptive investor." A majority of the buyers are backing out citing reasons like: -inability to sell their existing home -inability to get financing due to economy -laid off from work
Since the P&S contracts were signed as "primary residence," the developer would have to somehow prove that the buyers were walking away for other reasons than the simple inability to close as noted above.
You are correct about having to pay for the developer's costs if you lose. However, that is only true if you decide to proceed to a lawsuit. Most of these cases settle way before court (in mediation or arbitration) because it is not cost-effective to go to court unless one of the parties is very clear they will win.
But again, I agree with you that this not a NO risk approach, however, you should definitely consider it prior to walking away from your $20,000-$100,000 deposit.
Back in January over on the Seattle Condo Blog Condoboy and I discussed whether supposedly "airtight" contracts like Olive 8's could be cracked. Well, we now know that it's possible. My partner, Craig Blackmon, and I just won a case against the Washington Square condo project in Bellevue. Interestingly, it would appear that the same law firm that was involved in drafting Washington Square's contracts was also involved in drafting Olive 8's contracts and will also be representing both of them in litigation over those contracts.
Washington Square sued my client and the case was subject to mandatory arbitration. The bad news for WA Square was that the arbitrator agreed that its contract violated a federal law called the Interstate Land Sales Full Disclosure Act ("ILSA"). As a result my client was awarded 100% of his earnest money plus attorney’s fees and costs and interest. Unfortunately for all the other WA Square buyers, this ruling is not binding on any other buyer.
Olive 8's contracts contain numerous similarities to WA Square's so we continue to believe that Olive 8's contracts are far from airtight. However, this blog comment is not intended as legal advice and should not be relied upon as such. If you have a contract with Olive 8, Washington Square, or any other condo developer and want to find out what your legal rights and obligations are you should contact a licensed attorney of your choice as soon as possible. Time is of the essence so do not delay.
If anyone would like to discuss their Olive 8 contract or to learn more about the group of clients my firm represents feel free to contact me at 206-357-4224 or marc@lawofficeofcraigblackmon.com.
For more information on ILSA go to the Dept. of Housing & Urban Development's website at http://www.hud.gov/offices/hsg/ramh/ils/ilshome.cfm.
I decided not to close my unit. Williams Marketing told me to sign the termination letter to get my interest. If I don't sign the letter, can't I get the interest from bank?
Best bet is to talk with an attorney. You don't necessarily need to sign up with one, just tell them you don't care about the EMD and you're content with just getting your interest back.
In response to those inquiring, I am an attorney assisting condominium buyers with earnest money disputes. My phone number is 206-438-3851. Please give me a call to discuss this matter or any other real estate issues.
I think people do care about their earnest money. That being said, the purchase price of the unit was agreed and printed in black and white as part of a legally binding contract.
While it is unfortunate that closing will leave many with negative equity, this is not reason enough to get your money back should you walk away. If the unit had appreciated (which some were betting it would) the contract would not have been changed. Unfortunatley, the market did not swing the way many thought it would and they are looking to transfer the blame as a way to not meet their obligations.
The exception should be the units where the unit does not meet the expectations of the buyer. It sounds like some have quite a few problems; these people should be entitled to walk away without penalty. However, everyone else who is walking away was partner to a bad decision for which there are real consequences. I hope those who do not take responsibility for the loss of their earnest money and decide to litigate do not prevail.
Way thing are looking, people will get part or all of their EM. So, if you were ignorant enough to sign off on termination of PSA and not getting your EM than, too bad. :-)
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ReplyDeleteI'm one of the non-buyers at this time. I'd love to get together with other non-buyers to discuss our options. Hire an attorney? I'd consider it, but I don't want any more out of pocket expenses. Anyone else want to get together? I know of two attorneys that are representing olive8 buyers. I'm sure they'd be interested in meeting with us and sharing their thoughts.
ReplyDeleteinstead of paying out of pocket, you are still due interest gained (even if the earnest money is forfeited) on the earnest money while o8 has had it the last couple years.
ReplyDeletetake that earnest money interest and put it towards a lawyer. its usually 1k for initial cost then giving him 1/3 of the total settlement
out of pocket cost is 1k plus 1/3 of whatever he gets back
better than nothing...
Yer not going to get the earnest money back. Can pretty much forget about it. save yer money on a lawyer.
ReplyDeleteanyone hire an attorney?
ReplyDeleteI'm currently in contact with a lawyer. I'll keep you guys posted.
ReplyDeleteDid you have to pay a retainer? How's the response from the developer??
ReplyDeleteLawyers are reviewing the contract and if they are go than we are looking at class action. This way no one has to pay the retainer fee and pay percentage of from collection.
ReplyDeleteFrom my assessement, a class action indicates that the developer will not give in easily and is willing to litigate. This is risky for all prospective buyers looking to hire an attorney and litigate because if you lose, you will pay for the other party's attorney's feels. So if you're not willing to spend anymore than your earnest money, you might want to think this through. Also, just because you don't pay an attorney for the retainer, there's still out of pocket expenses you will have to pay, such as filing fees, printing, and mailing fees, etc...
ReplyDeleteSorry...attorney fees...
ReplyDeleteI spoke with Marc at Law office of Craig Blackmon. He has a few Olive8 clients right now. There is a retainer fee and then he gets 1/3 of the recovery. Be prepared to negotiate with the developer. If you only get 50% back, the attorney gets 1/3 of the 50%. Not much left after that.
ReplyDeleteHas anyone spoken with Steve Crane at Crane Dunham?
So let's play out the scenario on a $30K earnest money:
ReplyDeleteScenario A. At 50% recovery that's $15K minus a small retainer of say...$1k. Now, that's $14K minus 30% = $9,800. (Doesn't factor in filing fees, etc) thus this amount could be a little less than $9,800 back to you.
Scenario B: Say you lose after ligitation and have to pay the other party's attorney fees. And let's just say a few clients equals three existing and include you would be four clients to divide this expense - assuming you retain the same counsel. Now, the unknown factor is the attorney's fees. For the sake of simple arithmetic, what if the developer's attorney fees are $40k? Then you're each out $10k.
In short, if you were to weigh the risk vs reward; There's a chance you could recover $9,800 or fork out another $10K. The net net in this case is the risk outweighs the possibility of an award.
Sorry, it's late, I hope my rationale makes sense...
Now, I'm not advocating no attorney, because I have also considered hiring an attorney to recover my earnest money. However, I'm reluctant because I do not want to incur additional losses...
2/3 of 50% is still better than nothing
ReplyDeleteBut is 2/3 of 50% worth another $9800 to you?? Thats the risk!
ReplyDeleteOn the contrary, if an attorney is willing to file a lawsuit, that is a good sign. If they don't think they have a chance, they will not waste their time and effort to go through with the lawsuit. Don't forget, if they lose, they only earn the retainer fee and they've lost on all the hours spent preparing for the lawsuit.
All:
ReplyDeleteI am not an attorney but I work with them on a daily basis. I am an expert hired by attorney to testify inside and outside the court system. Litigation is the wrong way to go because this would take a very long process and it is very expensive. Litigation may take years because of our court system. Your best bet is to go for arbitration. This is the quickest, cheapest and most practical way to recover your money in full of partial. Not sure if you guys know what artbitration is, but for the purposes of discussion, this is decided by an arbitrator mutually selected by both the defense and plaintif counsel. This process is conducted outside the court system and the results are almost immediate.
Here are few suggestions that I would like to offer:
1. Gather as many people as possible and collectively decide on a legal counsel. The more the better because your attorney fees would be almost insignificant.
2. Start a dialouge with an attorney and discuss important terms and these terms should be made contingent on the outcome of arbitration. Be clear (well documented terms) on attorneys fees and % of money that would go to the firm once settled. You can also arrange for the Olive 8 to pay your attorney's fees if the arbitration results rule in your favor. You also would like to be clear with the attorney that if the verdict is against the group that you are not willing to put out more money out of your pocket. All these could be discussed with your lawyer.
I know you guys don't know me but trust me this would be your best approach.Securing the services of an attorney would be imperative and do it quickly because you close of escrow if fast-approaching.
Hope this helps.
Arbitration vs. Litigation: I also posted on the looking for concessions section of the blog. go there for my full post... in summary the suit would have to be filed in District court which date would be set sometime late in 2010 or possibly early 2011. It will most likely be 2 - 5 years for court determination and then you have to collect.
ReplyDelete*** Go Arbitration... but, we all need to get going! ****
how do we "get it going"?
ReplyDeleteIf you are all interested, I'd be willing to facilitate another buyer's only event. I would invite all of the buyer's that are NOT planning on closing. I would invite two different attorneys to attend (at differing times) to present how they could help us. Or, we could meet separately before setting a date to meet with the attorneys. At this time, I know that Craig Blackmon and Steve Crane are attorneys that could potentially help us. Thoughts??
ReplyDeleteI reserved a unit at Olive8 and will not be closing on the unit. I do not want to hire an attorney. Does anyone know if it is possible to write-off the earnest deposit? I was planning to buy the unit as an "investment" property, but I used my personal name on the paperwork. If I would have used an LLC, I probably could have written it off. Does anyone have any experience with this?
ReplyDeleteI've had several friends who are talking with Steve Crane right now about their deposits with Vulcan, but i think they are going with percentage of settlement or a combination of fees/settlement. Either way, I know they can't afford to just give up their deposits so obviously the benefits outweigh the costs, at least in their case. It can't hurt to call I suppose.
ReplyDeleteFirst unit at Olive8 has closed and is now back on the market. Look it up on Redfin. I wonder how many investors are at Olive8??
ReplyDeleteDont see it on Redfin. Can you link it?
ReplyDeleteThere have not been any closings at Olive 8 as of this time. 1st closings are next week.
ReplyDeleteThere have not yet been ANY closings at Olive 8. 1st closings are next week.
ReplyDeleteHere's the listing on Redfin:
ReplyDeletehttp://www.redfin.com/WA/Seattle/737-Olive-Way-98101/home/18247460?utm_source=myredfin&utm_medium=email&utm_campaign=email_this_listing&utm_nooverride=1
Re earnest money : Met with accountant if you can prove that your intent to purchase a condo was for business such as through an llc to make profit and you then decided not to go ahead due to market conditions then you can claim a loss at $3000/ year on your tax return. Better than nothing :)
ReplyDeletecan any case be made about the fact that we were sold the condo under the premise we could buy with 5% down, now it is 15% down. going from 35K down to 105K is huge. and now the developer gets to keep the 5% if you cant come up with another $70,000... it just seems wrong.
ReplyDeleteDid anyone get a letter from Olive8?
ReplyDeleteA letter regarding???
ReplyDeleteRegarding HOA and reserve info.
ReplyDeleteYes, it seems all HOA dues went up.
ReplyDeleteHas anybody actually closed yet?
ReplyDeleteSupposedly, closings will begin this week.
ReplyDeleteI know more people that will be walking from their earnest deposits than people that will be closing.
I was at the buyer's event last week and it seemed like there were barely any buyer's there.
I am confused as to what you guys think you can sue the developers for? Its not their fault you fell for the real estate bubble, I am sure they wished it kept going as well so both of you could be rich. It seems to me a lot of people made a gamble and lost and now want to sue the house for their money back.
ReplyDeleteAfter seeing what was supposed to be my "luxury" unit last week, I've now decided to walk.
ReplyDeleteI really wanted to live in the building, and I thought it was a great concept, but their execution has been poor. I won't be hiring an attorney, because it would be useless.
We all took a gamble, the economy tanked, and Olive8 didn't pull through for us with a quality product. I'm moving onto the next battle...
Here's what I was told by a real estate agent in Bellevue:
ReplyDeleteIf the buyer can't get financing, the deal falls through and the earnest money is returned to the buyer.
Worth looking into.
That would be true if the contract had a financing contingency. Olive 8's does not.
ReplyDeleteanyone have updates regarding the hiring of a lawyer? i'd love to be a part of this and i'm sure others would as well.
ReplyDeleteby buying pre-construction, you all took a gamble. you were getting in at what you figured was a lower price.
ReplyDeleteyou win if:
1. prices appreciate
2. the layout turns out how you like
3. homeowner's dues stay the same
4. the building is fulling occupied
all four scenario's apparently are not coming true.
so, your gamble lost.
don't try to socialize the losses by dumping your properties back when you were hoping to privatize the gains.
I think the developer is just as guilty.
Is the a group formed yet for possible arbitration. How many? Should I be contacting Crane or Blackmon regarding arbitration? Please advise.
ReplyDeleteHow do we all get started on the Arbitration path. Please comment on who we should all contact. Lets group together.
ReplyDeleteHere's some advice. I know it sucks but you shouldn't have been getting into something that you possibly couldn't handle. I am a buyer and I'm continuing with my purchase. This is possible because I was prepared for what I was getting into in the first place. It's known that if you go to purchase something... ie, house / condo, and you pull out... you more than likely will lose your earnest money. All of what I read above just gives me a headache. With a lawyer, when it's all said and done, you won't be getting much back after taking a deal and paying them for the help. But do what you like. Sounds like most of you were buying in as a investment property. Well with all investments there is the possibility of loses and that's what this is. Hope it works out for you all. On a possitive note. You can probably get the interest made on your deposit.
ReplyDeleteIt's true that it sucks, but why would you continue with your purchase? The market value of these units has dropped by far more than the earnest money deposits. Even if you want to buy, the only rational move is to forfeit the earnest money and negotiate a new deal at the current market price. Am I missing something?
ReplyDeleteWell depends... I actually don't think my unit is below market. I bought in first phase so... When I run comps I'm good to go from the numbers I see. As well as having faith in the building and the future. It's not like you're buying in a rats nest. What is going to drive down the price is everyone bailing which I and friends discussed along time ago. In all the buyer gatherings I could tell a lot of people were not really buying into something they could hang with is something happened. So surprised we were close to right. I have 2 friends that are opting to lose and there's nothing they can do. Sucks totally sucks.
ReplyDeleteWhat are you using for comps? The only condo I've seen coming in at the Olive 8 price is 1521 which is averaging at ~$700 sq ft - for a building that is arguably more high end than Olive 8.
ReplyDeleteEverything else seems to be coming in under $500 sq ft e.g. look at Mosler ($500), 5th and Madison (under $500) and Gallery (as low as $450).
I was perfectly aware that I could lose my deposit if I walked. HOWEVER, i am not walking because I want to, I was qualified to buy witha 5% deposit, I am now required to put down 15%.... thats an extra $75,000.00 - i dont have it, so now the developer gets to keep my deposit, That is a little tough to swallow.
ReplyDeleteI dont agree with investors trying to get their money back because they made a bad bet, but I am not an investor, and I want to close. look, I know its my fault for putting ink on the contract , but I can be pissed if I want to ( and try different methods to get my money back.)
Good luck to those that are moving forward with their pre-sale P&S agreement. As for me, I will back out as I do believe prices will come down after developer reviews who's closed vs. who's backed out.
ReplyDeleteIt's another decision. If it turns out that pricing is lower than compared to the reserve pricing then we've made the right choice. If not, then it was not meant to be in the first place.
I just want to avoid feeling even more stupid for buying a unit at $595K just to see the same unit above me that didn't close for $495K - which could become reality. If that's the case, i've only lost $30K vs. potential of $100K.
So again for those who are closing - we'll just see in the coming months/year ahead who's doing the right thing.
Alright guys....for those of you interested, lets talk about getting an attorney. I've just received the name of a 3rd attorney that is working on a class-action lawsuit against Hedreen.
ReplyDeleteWho's interested in another buyer meet-up? This meet-up would be for buyers that are planning on walking away and NOT purchasing. I would have the a couple of the attorneys join us for the meeting and present their offer.
I'd be willing to consider hiring an attorney if it wouldn't cost me to lose even more money. I am ok with walking away from my 30K. I am not ok with losing another 10K just to chase after some of the earnest deposit. I'm interested in finding an attorney that has no retainer. I also would prefer joining a class-action lawsuit. The reason for this is in the event that we do lose, we then split the cost of the defense legal fees between a large group of clients vs. footing the bill on your own.
If interested in another meet-up to talk with 2-3 attorneys (they'd come at different times), email me.
olive8buyer@gmail.com
I'm down.
ReplyDeleteIf you can find an attorney to run a class action with little out of pocket expense you'll have a bunch of buyers willing to go along with it.
Count me in too.
ReplyDeleteim in ... i'll email you as well.
ReplyDeletewhen will we the meet?
Not an Olive8 buyer. In fact, I live in Phoenix and stumbled in here through a link.
ReplyDeleteSomething to think about before closing: going forward, your biggest competition in determining the value of your condo will be the developer itself. When push comes to shove (or bankruptcy), the developer (or its creditors) will find that NO price is too low to contribute to the recovery of defaulted bonds. Most companies can't, or won't sell items below cost. A bankrupt company can, and usually will, do so.
There's a big difference between someone getting their LCD TV cheaper than you at the Circuit City liquidation sale, and the developer selling a unit (forever known as "a comp") at half the price of what you paid for it.
Your first loss is your smallest loss, right?.........
From "Yo," a poster on urbnlivn.com blog:
ReplyDeleteI'm not planning on closing due to the following:
1. Concerns about unsold inventory. Olive 8 is a higher level building with a higher price tag which I believe will have a tough time moving the remaining inventory over the upcoming years. Are there really people out there who are willing to pay 500-800k for a sub 700 square foot condo? Not in my opinion. My guess is that the remaining units will either go the way of: auction, apartments, and/or price reductions. None of which bode well for current buyers. Am I willing to bet prices will drop greater than 5% (my earnest money) of the price I'm locked in at? In my case - yes.
2. Changes in the financing climate. It's harder to purchase a condo in comparison to a house, and with this building possibility becoming a high number of rentals, it's going to be even tougher for resales. We're starting to see this with Williams Marketing already renting out units. I'm absolutely shocked to see that clist ad with the WM logo plastered on it advertising a rental. Lower amounts of rentals makes the building more appealing and also easier to finance. Why the company marketing the building is also playing renter just seems like they're shooting themselves in the foot. Not a way to inspire confidence in those planning to close.
3. How investor laden the first half of the building is. Those of who reserved planning to make Olive 8 our primary residence are really getting the shaft here. I feel like I fell sucker to a classic pump and dump. When I signed a great number of the units were already reserved. Little did I know that a lot of those reservations were investors or actual real estate agents. Had I known I may have made a different decision. No one to blame but myself on this one.
4. Finished quality. Not impressed one bit. I think they've really dropped the ball on this one. From the units not measuring up to the original square footage to the touch and feel of the unit, it just didn't give me that "wow" feeling I was expecting to have. Think of it as expecting a Lexus and instead receiving a Toyota. I don't think I'm the only one that feels this way - looking at the number of units showing up on craigslist one can see that the number has multiplied since the open house. IMO the developer was in a rush to get them done and cut corners in order to make it happen. I could be wrong though.
To me it's a perfect storm. If unsold inventory wasn't a concern I may be willing to overlook the finished quality, if finished quality was what I was expecting I might overlook the concern about unsold inventory, ect. But it's really a combination of all four that made my decision not to close a concrete one. The fact the developer has been absolutely silent throughout this entire process has cemented that decision.
Why I would consider closing:
1. No HOD's in the forseeable future. A building must be 70% closed to start collecting HOD's. Chance are this 70% mark won't be hit for a couple years.
2. Already got my 5% in. If I could buy the unit without taking any more money out of my pocket I probably would and just rent out the thing for the next ten years.
3. If I was in for the long term I'd close. Five years won't be viable, ten years yes.
4. The pool area/gym is cool.
It really stinks to walk away from that 5%. But I've been without it the last couple years and while it would be nice to have it back (hello new car!), missing that 5% won't affect my life at all. I could sit here and think to myself what I should have done differently but that won't change things one bit. Reading the news daily about the hardships others are going through pales in comparison to the 30some thousand I'll stand to forfeit. Heck, I have a decent job, good health, and close family. What else could one ask for. :)
so whats the deal?
ReplyDeletei emailed olive8buyer a week ago and haven't received a response
anyone still chatting with lawyers?
Sorry about not getting back to you. Here's the update:
ReplyDeleteI've spoken with 2 out of 3 attorneys that all represent Olive8 buyers. I've made contact with the 3rd attorney and will be speaking with him tomorrow. Once I speak with him, I will arrange a time for a buyer meet-up to let these attorneys present to us. Then, individually, you can decide which attorney to work with, if you decide to do so. I'll provide another update in a few days.
I can't close and they told me they won't let me assign the contract if I find a buyer. They
ReplyDeleteare letting other people assign and I see one of their employees are assigning their contract.
This is completely unfair, is there anything I can do?
Thanks for getting this together Olive8Buyer, its much appreciated
ReplyDeletei havent heard of anyone closing, dropped by on saturday and there wasnt a single name in the call box yet
ReplyDeletedown for these meet up as well. Looks like it might be prudent to just walk away at this point but if I can get some money back that I deserve then I'm all for it. Kinda got screwed by wiliams...
ReplyDeleteThere have been 10 closings so far and 5 additional sales in the past week. In my opinion the building is amazing. I do not think anyone got screwed by williams. We got screwed by the economy. It is the worst possible timing. I think it is completely fair to get half of our earnest money back but we are probably not entitled to all of it. We are all victims of unforeseen circumstances.
ReplyDelete5 additional sales in one week? After none in the past year? Sounds like crap to me.
ReplyDeleteI agree whoever wrote this about 5 additional sales is baloney. Give us a break whoever you are.
ReplyDeleteI have nothing to gain by saying this. The past year was presale. There is a big difference in presale and actually selling a unit that is ready and available for purchase.
ReplyDeletemajor BS
ReplyDeletefive additional sales?
ReplyDeletewith all the people trying to dump their units on craigslist for the original presale amount?
please
people PLEASE stop attacking people who post positive statements here. I come to this site to get info, and info is more valuable if you get it from both sides, whether or not to close is a HIGHLY debatable situation with many variables ( influenced mainly by price,hold time and what happens to the economy going forward), if I want one sided I'll watch fox news.. I am walking from my deposit ( I am forced to by being out of work), and I would love to get half of it back, but that is not what I am hearing from williams or the developer.
ReplyDeletewhat kind of response did williams/hedreen offer you when you disclosed your current employment situtaion?
ReplyDeleteAlright....time for the update.
ReplyDeleteI've spoken to 3 different attorneys at this point. They all currently have Olive8 clients.
Law Firm A: They are considering filing a class action lawsuit. If that is the case, then every Olive8 buyer that walked away from their deposit or decided to close would benefit. A decision by this law firm will be made by the end of the week. They are a large law firm with almost 20 attorneys. They have already reviewed the P&S and outlined multiple "common" issues that they have found. Hedreen has responded and is going to fight. If they decide to not pursue a class action, then they would likely go contingent or hourly.
Law Firm B: He currently represents multiple Olive8 buyers. He is charging a retainer fee and then it is contingent (1/3). He will also do hourly work. He has already reviewed the P&S and has sent the initial letter to Hedreen. The response has not been good. It will be a fight and the developer is not willing to negotiate.
Law Firm C: He currently represents 6 Olive8 buyers and has 4 more coming on. He also charges a small retainer fee ($250) and then its contingent. The retainer fee will also go towards legal fees (copying, filing costs, etc), so the retainer fee is essentially credited towards client costs.
Anyways, this is all pretty good news. I'm very hopeful about Law Firm A and will know more information by this Friday.
I'd like to setup a buyer meetup and have all 3 attorneys come for 15-20 mins each to make their pitch to us. Law Firms B and C would like us to sign up because the more clients they have, the better they can negotiate. Law Firm A says that we don't need to do anything if they file a class action...we are automatically included.
For these attorneys to come to our meetup, I will need a decent group of people that are willing to attend. Please email me at olive8buyer@gmail.com if you are interested. Tell me the date that works best for you. I'll probably do an evening time during the week next week.
Olive8buyer
Class action lawsuits are a red herring...careful if you decide to go that route...they always benefit the lawyers more than the individuals represented. Look - it's tough - but you signed an agreement and knew the risks. If you did this with a normal homeowner you wouldn't get the money back either - that's real estate 101! We've actually started to look at Olive 8 as a buying option...and yes if you check with any agent there have been recent closings there (I think I saw 3 in the last week according to our agent)...so people are buying...and this weekend we bumped into folks moving in...so all the doom and gloom on this blog is understandable but not helpful unless you are just here to vent. Getting loans for condos are super tough right now...but if you want to live downtown, there aren't many options...thus making any condo purchase a good long term investment. Just wanted to bring some objectivity to the discussion. :)
ReplyDeleteIf you really want to be objective. Don't compare what has been the norm in real estate years ago or what you call "101". What happened to our economy is unprecendented and whether you like it or not you have to put this into consideration. What was disccused 2 -3 years ago with these buyers as far as "standard" loans practices are concerned are no longer applicable in today's economy. There needs to be consideration placed here for the buyers. If people are using this site to vent then respect them because it is their way of coping. Your quote "objectivity" is not adding comfort to people you are putting salt to a gaping wound and I think that is cruel and rude.
ReplyDeleteAfter speaking with law firm "A" about class action lawsuits, they indicated that their plan would be to recoup their attorney fees from the developer and the developer's insurance company, not from buyer deposits. So why wouldn't we consider going that route?
ReplyDeleteRe the Firm A class action option... What happens if the suit goes to court and loses? Are folks on the hook for the developers legal fees?
ReplyDeleteAnd what about folks who already have chosen a legal path? I don't like the idea that some firm can come along and decide to be my attorney for me.
olive8buyer,
ReplyDeleteI sincerely appreciate what you are doing with the blog etc, but for the love of god I am trying to figure out why you are not listing the names of the attorney'(s). I do not have as much time as you, and i need to ask them a couple of questions. I think as the blog creator you can see what my email adress is, so please email me if for some reason you are not willing to post it. you keep saying ab&c... how about some names, if you are planning a "meet" we are going to find out anyway, how about some help for us people on the lower floors who dont have any more time. PLEASE!!!( especially the class action one)
olive8buyer
ReplyDeletegreat work - keep it up!
"Re the Firm A class action option... What happens if the suit goes to court and loses? Are folks on the hook for the developers legal fees?"
ReplyDeleteNo, Lead plaintiff might be hooked for fees related to filling, copying, etc. but not developers legal fees.
"And what about folks who already have chosen a legal path? I don't like the idea that some firm can come along and decide to be my attorney for me."
You don't have to be part of Class Action, if you choose not to.
For those who are interested, Countrywide has closed on 7 units in the building thus far.
ReplyDeleteWhat grounds do we have for filing a lawsuit?
ReplyDeleteThis comment has been removed by the author.
ReplyDeleteHas anyone received an email from Olive8buyer re the meeting?? Thanks
ReplyDeletewhats the word on the class action?
ReplyDeleteIt seems that there are three basic choices that buyers have who are not going to close: 1) walk away from the earnest money deposit without seeing if they can recover part or all of the deposit, 2) hire an attorney to represent us now as individual buyers, or 3) wait and see if someone files a class action case at some time in the future.
ReplyDeleteAssuming that one is not ready to walk away from their deposit, then hiring a law firm experienced in doing condo deposit refund cases in many buildings all over the area, and that represents buyers on an individual basis, appears to be the best available option to me. It provides a buyer with legal representation, on an individualized basis, as important decisions need to be made NOW about what to do concerning escrow, financing, scheduled closing dates, etc.
It is my understanding that class actions have very strict requirements that have to be shown to a judge to have been met. They also typically take much, much longer to get resolved than non-class action cases. Perhaps more importantly, they are much more difficult to get settled directly with the other side because the dollars involved are much larger. Finally, while settlements in class actions may split out legal fees from awards to class members, the reality is that this is almost always an accounting exercise that simply reduces the amount which class member will ultimately get. One way or another, the buyers will be paying legal fees out of the settlement, whether as a class action or as an individual action. All of this without individual representation of a buyer’s interest.
I decided not to close my unit. Do I lose the earnest money only or lose all the money including interest? I would feel better if I can get some money back.
ReplyDeleteYou will at least get your interest back.
ReplyDeleteHas anyone sign the termination agreement yet? What are the consequences for not signing it?
ReplyDeleteI have not signed the termination agreement, but i plan to. I think I want to just put all this behind me, it is one disappointment after another. I knew the risks, but using their preferred lender, getting qualified to buy with 5% down, then being told I need to have 15% down, and If I cant come up with it, they get to keep the earnest money? it is making me incredibly angry to keep thinking about it, so I think I need to just put it behind me. ( I really think it would be fair to get half of earnest money back)
ReplyDeleteDo not sign the termination agreement. The second you do that, they get the earnest money. Otherwise it is held in the courts and they wont see the earnest money for up to 18 months. It cannot be released to them unless you sign the termination agreement. A small bargaining chip for you.
ReplyDeleteDid anyone receive a letter from the seller threatening to take legal action if we don't sign the termination agreement?
ReplyDeleteWhat about the threat of having to pay their legal fees if I don't sign the termination agreement?
ReplyDeleteThere is now the 09 plan lsited on MLS #29055419 for $375k that is a resale. I am 3 floors below this and paid more. I dont recall prices in 06 being this low.
ReplyDeleteAlso read this article: http://seattletimes.nwsource.com/html/localnews/2009113376_condoclosings24.html
This part made me extremely nervous:
Thirteen Olive 8 units have closed so far. Thyer says closings should continue into July. “At this point, we’re still holding our prices,” he says. “But if the downturn continues, we may have to revisit that.”
uhhhh yea, that means prices are heading down....
ReplyDeleteIn todays seattle times article, David Thyer says closings are going great... LOL... who is he trying to convince? I that by my closing date there should have been at least 59 closings, there have been 12! do the math. People are running, not walking from their deposits. I almost feel bad for the developer. almost.
ReplyDelete“But if the downturn continues, we may have to revisit that.”
ReplyDeleteYea, I'm really going to close now. Was he really quoted as saying that. Really? Seriously? For real? Why would I want to close when prices are going to drop? My goodness.
Has anyone else received a call from the developer trying to salvage the sale? The person on the other line said there were "options available" but locked up when asked specifically what. How about taking 20% off my sales price? Then we'll talk.
Too little, too late. Should have received that phone call months ago. I may have actually considered it then.
So what lawyer/lawyers is everyone going with?
Oh, and yea, only 13 closed sales? They've closed five floors? Are they nuts in thinking that's a number to publicize?
The developer is offering second loans on 5yr terms if you are having difficulty coming up with the deposit but are able to service the loan. Not a bad option if you really want to live there and believe that there IS a future for U.S real estate!
ReplyDeleteYeah, very encouraging that people with upcoming closing dates will see prices drop after they close. Nothing like knowing your neighbor 3 floors above you with killer views paid 200k less because they didnt lock in at "early prices"...
ReplyDeleteAny luck with attorneys?
Attorneys from different firms are talking to each other.
ReplyDeleteI have been talking with Crane Dunham. They have some experience in this and seem to know what they are talking about. Here is their info.
ReplyDeletehttp://www.cranedunham.com/newsletter.htm
My closing date is coming. However I decided not to close the contract. Do I need to notice the Williams Marketing that I want to terminate the contract now? I heard some people working with attorney to get honest money back. I'm not sure it's worth. I really want some advice. Thanks.
ReplyDeleteCall Steven Crane at Crane Dunham.
ReplyDeleteIf you sign the termination agreement, you forfeit your earnest deposit and you also lose any future rights to join a class-action lawsuit.
For $250, its not a bad deal.
Marc Holmes and Craig Blackmon represent a number of buyers and are currently trying to work with Olive 8. 206-357-4224.
ReplyDeleteHey all,
ReplyDeleteJust wanted to let you know that Steve Crane (attorney) has negotiated a tolling and standstill agreement with Hedreen. This stops the statute of limitations (2 years from signing the purchase and sales agreement)from coming in to effect. How is this helpful? If you ever decided to file a lawsuit due to deficiencies in the contract, it could be dismissed by the court if the statute of limitations comes into effect. By having him add your name to the agreement, you are protected from this. Also, he has negotiated a non-litigation agreement for a short period of time as mediation and/or settlement is discussed.
I'm not sure if I explained this properly but call Steve and he'll be able to explain it better. Again, for $250, this isn't a bad option if you are definite you aren't closing or even if you want to negotiate with Hedreen but your 2-year mark is approaching.
I spoke with the concierge yesterday. She told me that 13 buyers have moved in so far.
ReplyDeleteAlex Thomason is working on a class action lawsuit with quite a few Olive 8 buyers. They are taking cases on contingency basis. (25-30%) I have listened to many attorneys and Alex's approach seems the one with the best chance in front of a judge. Alex's law firm is very experienced and knowlegable in this and know how to manage class action lawsuits. If they weren't convinced this case is winable they would not have taken it because they only get paid if they win. There is power in numbers so if you are thinking of walking away from your earnest money, talk to Alex first.
ReplyDeleteALEX H.S. THOMASON | LAWYER
STANISLAW ASHBAUGH, LLP
COLUMBIA CENTER | 701 FIFTH AVE | SUITE 4400 | SEATTLE, WA 98104
T. 206.386.5900 | F. 206.344.7400
WWW.LAWASRESULTS.COM
thanks for the tip alex!!! I kid :)
ReplyDeleteCrane and Dunham has nearly 20 buyers on board,they are also working on contingency. maybe all these attorneys should get together and have a cup of tea and become friends.
just remember,
yes there is power in numbers, especially for the attorney.
most buyers cases will be very similiar despite what they tell you.
in short, they will put roughly the same "man hours" into one buyers case as they will into 50 buyers cases, but with 50 they will collect 50 times more money.
I am shopping attorneys as well, but I know the contingency deal doesnt mean they are "oh so sure" they can win, it just means there is a truck load of buyers looking for lawyers.
If you are shopping attorneys, as most of us are still undecided, can you let us know what you find out and think. It would be good if all the cases could come together. But probably not going to happen.
ReplyDeleteI know Rebecca Reed also has some Olive 8 cases.
And so does Benjamin Lee.
I am the one who recommended Alex as I know some others who are using him and have talked with him and have been impressed.
But I still have not signed with an attorney yet but will have to very soon.
Does anyone know the legal theory that these attorney's are using to try and get a buyers earnest money deposit back? The P&S seems pretty clear to me, and I haven't figured out what angle they are using against the developer. Is it the number of buyers banding together to do this? I know in Miami, et al, this has not worked. Can anyone who has talked to one of these attorneys and understands it shed some light on what the basis would be?
ReplyDeleteafter it being explained to me, My understanding is ( and this is the case with most of these situations) the lawyers try and find some tiny detail within the contract, a tiny loophole or a "T" left uncrossed by the developer or a statute from the early 1930's... you get the idea, then if argued correctly in front a judge would/could negate the entire contract.
ReplyDeletemy closing date has already come and gone, I do not have an attorney... yet.
I think they are looking at missing, misrepresented, or misleading legal elements in the Public Offering Statement.
ReplyDeleteI talked to one lawyer who is considering using the Interstate Land Sales Full Disclosure Act (ILSA). He said there is going to be a ruling in Washington where the plaintiffs argue the sponsor did not follow ILSA and therefore voids the contract. The decision is to come this week or next and should set some history and guidelines about whether other buyers can use ILSA to recover earnest money.
ReplyDeletefrom http://works.bepress.com/james_saad/1/
ReplyDeleteThe Interstate Land Sales Full Disclosure Act (the “Act”) is a federal law regulating the sale of condominium units and subdivision lots. It is patterned after federal securities laws. The developer’s failure to properly register a subdivision can give purchasers the right to rescind the contract. Purchasers also have causes of action for fraud under the Act. The Act is largely ignored until the real estate market collapses. By no coincidence, litigation under the Act is heating up in Florida and other locations in the current market. The Act is a widely misunderstood law. Its statutes and regulations are ambiguous, its case law includes more than 100 cases spanning forty years and nearly the entire United States, and the United States Supreme Court has never substantively ruled on any aspect of the Act (though it mentioned the Act in dicta in one case in the mid-1970’s). This article explains some of the fundamental principles underlying exemption from the Act. It also discusses the major exemptions at the heart of most current litigation.
Daoes anyone has Craig Blackmon's email address? I am going to back out of the purchase as well
ReplyDeleteYou're options are:
ReplyDeleteCraig Blackmon: www.lawofficeofcraigblackmon.com
Steven Crane: www.cranedunham.com
Alex Thomason: www.stanislaw.com
I believe there were 2 others mentioned somewhere in this thread.
thanks a lot....don't give up and fight for your money! Anything you get back is better than nothing.
ReplyDeleteAfter reflecting and researching further, I have signed on with Marcus Holmes at Law office of Craig Blackmon today.
ReplyDeleteFor those of us that have not yet signed up with an attorney, can you tell us why you chose Craig Blackmon over the other lawyers listed on this blog? I haven't decided yet, but I believe Blackmon's office had a higher retainer fee than some of the other lawyers.
ReplyDeleteYou guys might want to keep a few things in mind regarding this idea of "nothing to lose" retention of lawyers.
ReplyDeleteFirst, the developer made a decision to add three floors to the building in large part due to the fact that they had almost sold out very early in 2006. Those buyers that were "deceptive" investors and stated that their purchase was for primary or secondary homes may be subject to fraud claims and damages incurred by the developer.
Second, if you lose, you WILL be at risk for the developers legal costs, which would most likely be significant.
This is definitely NOT a no risk approach.......
They would have a very difficult time proving if you were a "deceptive investor." A majority of the buyers are backing out citing reasons like:
ReplyDelete-inability to sell their existing home
-inability to get financing due to economy
-laid off from work
Since the P&S contracts were signed as "primary residence," the developer would have to somehow prove that the buyers were walking away for other reasons than the simple inability to close as noted above.
You are correct about having to pay for the developer's costs if you lose. However, that is only true if you decide to proceed to a lawsuit. Most of these cases settle way before court (in mediation or arbitration) because it is not cost-effective to go to court unless one of the parties is very clear they will win.
But again, I agree with you that this not a NO risk approach, however, you should definitely consider it prior to walking away from your $20,000-$100,000 deposit.
Back in January over on the Seattle Condo Blog Condoboy and I discussed whether supposedly "airtight" contracts like Olive 8's could be cracked. Well, we now know that it's possible. My partner, Craig Blackmon, and I just won a case against the Washington Square condo project in Bellevue. Interestingly, it would appear that the same law firm that was involved in drafting Washington Square's contracts was also involved in drafting Olive 8's contracts and will also be representing both of them in litigation over those contracts.
ReplyDeleteWashington Square sued my client and the case was subject to mandatory arbitration. The bad news for WA Square was that the arbitrator agreed that its contract violated a federal law called the Interstate Land Sales Full Disclosure Act ("ILSA"). As a result my client was awarded 100% of his earnest money plus attorney’s fees and costs and interest. Unfortunately for all the other WA Square buyers, this ruling is not binding on any other buyer.
Olive 8's contracts contain numerous similarities to WA Square's so we continue to believe that Olive 8's contracts are far from airtight. However, this blog comment is not intended as legal advice and should not be relied upon as such. If you have a contract with Olive 8, Washington Square, or any other condo developer and want to find out what your legal rights and obligations are you should contact a licensed attorney of your choice as soon as possible. Time is of the essence so do not delay.
If anyone would like to discuss their Olive 8 contract or to learn more about the group of clients my firm represents feel free to contact me at 206-357-4224 or marc@lawofficeofcraigblackmon.com.
For more information on ILSA go to the Dept. of Housing & Urban Development's website at http://www.hud.gov/offices/hsg/ramh/ils/ilshome.cfm.
another ambulance chasing lawyer...........
ReplyDeleteI decided not to close my unit. Williams Marketing told me to sign the termination letter to get my interest. If I don't sign the letter, can't I get the interest from bank?
ReplyDeleteBest bet is to talk with an attorney. You don't necessarily need to sign up with one, just tell them you don't care about the EMD and you're content with just getting your interest back.
ReplyDeleteIMPORTANT: If you choose to not move forward with closing, please contact an attorney. The more people we have on the list, the stronger the case is.
ReplyDeleteIn response to those inquiring, I am an attorney assisting condominium buyers with earnest money disputes. My phone number is 206-438-3851. Please give me a call to discuss this matter or any other real estate issues.
ReplyDeleteImants Holmquist
Holmquist & Gardiner, PLLC
Why are people litigating? You made a poor decision. Live with it.
ReplyDeleteI think people do care about their earnest money. That being said, the purchase price of the unit was agreed and printed in black and white as part of a legally binding contract.
ReplyDeleteWhile it is unfortunate that closing will leave many with negative equity, this is not reason enough to get your money back should you walk away. If the unit had appreciated (which some were betting it would) the contract would not have been changed. Unfortunatley, the market did not swing the way many thought it would and they are looking to transfer the blame as a way to not meet their obligations.
The exception should be the units where the unit does not meet the expectations of the buyer. It sounds like some have quite a few problems; these people should be entitled to walk away without penalty. However, everyone else who is walking away was partner to a bad decision for which there are real consequences. I hope those who do not take responsibility for the loss of their earnest money and decide to litigate do not prevail.
Way thing are looking, people will get part or all of their EM. So, if you were ignorant enough to sign off on termination of PSA and not getting your EM than, too bad. :-)
ReplyDeleteI did not buy at this project not sign off on anything...I would say making assumptions is ignorant :-)
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ReplyDelete